Production - Jars of sauce

20,000

Ingredient cost (variable)

$16,000

Labor cost (variable)

9,000

Rent (fixed)

4,000

Depreciation (fixed)

6,000

Other (fixed)

1,000

Total

$36,000

Using this information, a budget for May stating the total amount for the May budget.Assume the budget will increase to 23,500 jars of sauce reflecting anticipated sales increase related to a new marketing campaign.

Production - Jars of sauce

20,000

Ingredient cost (variable)

$16,000

Labor cost (variable)

9,000

Rent (fixed)

4,000

Depreciation (fixed)

6,000

Other (fixed)

1,000

Total

$36,000

The company is currently producing and sellingjars of sauceThe jars of sauce sell for $4 per jar.The company is considering lowering the price to $3.70 per jar.Suppose this action will increase sales.What is the incremental costs associated with producing an extra 58,250 jars of sauce?